Driven by a rapidly growing population and the recent approval of the largest government budget in the country’s history, Saudi Arabia’s construction sector is expected to continue to grow through 2015, pushing demand for aluminum products and keeping the Kingdom in the lead as the largest market for aluminum in the Middle East.
According to a recent report by Ventures Middle East, the value of the Kingdom's construction sector is expected to increase from USD 27 billion in 2010 to USD 44 billion in 2015 witnessing a compound average growth rate of 10%. Total building construction spend is estimated to be USD 217 billion excluding projects on hold.
Meanwhile, demand for fabricated aluminium products in the building construction sector is expected to increase at a CAGR of 9% from USD 920 million in 2010 to USD 1,442 million in 2015. The demand in volume is expected to increase at a CAGR of 10% from 5.4 square million in 2010 to 8.4 square million in 2015. Products with the greatest aluminium demand by value are; windows, 33%; curtain walls, 17% and cladding, 17%. Aluminium demand by volume is highest for windows, 35% cladding, 24% and curtain walls 15%.
In recent years, the use of aluminium for curtain wall systems and cladding for new and modern property developments has become more widespread thus fuelling demand for aluminium in the construction sector.
As the Kingdom of Saudi Arabia continues with its drive to diversify the economy towards non oil industries, focus has increased on upstream primary aluminium production, such as bauxite extraction and alumina refining. While the KSA aluminium industry has historically been focused on downstream production, the Kingdom is planning to become one of the major aluminium upstream producers in the Middle East after announcing 3 aluminum smelting projects at a total value of USD 19.5 billion. The total capacity of the planned projects is estimated to increase from 740,000 tonnes in 2013 to 2.4 million tonne in 2016. As for the downstream aluminium industry, KSA is now base for the largest number of aluminium processing factories in the region, which are in excess of 100. The five largest extrusion companies have a combined production capacity of around 144,000 tonnes per annum.
The business opportunities arising in the aluminium market in the Kingdom as revealed by the report will be discussed at the 2nd edition of Aluminum Dubai, the local version of Reed Exhibitions global series of aluminium events which also covers India, China and Germany. The leading aluminium trade show for the Middle East will be held from May 9th to 11th 2011 at Sheikh Saeed Halls 2 and 3 of the Dubai International Convention and Exhibition Centre.
Mr Tarek Ali show manager of Aluminum Dubai said that "The highly positive outlook of the KSA report only confirms our confidence in the regional aluminium market as led by the Kingdom. Demand for aluminium in Saudi Arabia continues to surpass the global level, which has been growing at around six per cent per year over the past decade. At the upcoming edition of ALUMINIUM Dubai, industry players will be able to get deep insights into Saudi Arabia's high potential market for aluminium. The event connects regional and international suppliers, customers and investors from both government and the private sector to make best use of the business opportunities offered by the region's high-growth market, while exposing them to the latest technology and concepts in the aluminum industry."
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